MYTH BUSTERS....Is being cheap really expensive?

[Michael Guzik]

Hey guys I have been listening to a lot of podcasts and many of them talk about frugality and saving money or being cheap. I was always raised to believe that being cheap is expensive, sure you may save money right now but over time you will spend just as much if not more if you had just purchased the more expensive quality item. My question is where should I be frugal or cheap? What parts or repairs on a house should I look to save lots of money on? What parts should I focus on quality, and not focus on the price? Where in my personal life should I be frugal and where should I care about quality? What routines, practices or places do ya'll shop to save money or buy quality items? Thanks for reading and I appreciate any and all comments!

[Jim Goebel]

One of the sayings that really annoys me 'to the max' is the following:

You get what you pay for.  I couldn't disagree more.

I could list off the top 10 deals that I've obtained that did not fit this, in a good way.

I could list off the often inherent conflict of interest that is usually present from people that say this - ie: the window supplier/installer that is selling the $700 windows with little added value, etc.  It's usually the folks that don't understand the difference between VALUE and PRICE that say this, or have something to gain by making people believe it.

All this said, we have at times had a lot of time sucked up because of the purchase of say a used dishwasher from Menards, as an example.  

I think a better way of thinking about decisions is constraints.  Constraints are different for different people at different times.  At times, (and I'm speaking from experience) we could afford nothing other than getting the $50 used dishwasher and doing our darnedest to make sure that it worked, that we were protected if it didn't, etc.  That's looking for value.  There are other times when time is more of a precious commodity and one can't afford the time that may come with testing and understanding the problem of the used dishwasher, and getting a replacement heating element for it, and swapping it in.

The takeaway here though is that unfortunately there's not a simple answer.  It depends on who you are and where you are.  We are transitioning to where money is less of a constraint (although it always is to some extent) - and where time is more valuable.  It seems that's a common transition and trade-off.  But, it's not the only one.  It's just one and it just speaks to a couple constraints that should guide decisions (money and time).  Other common constraints that should also guide decisions include:

1. capabilities
2. gumption/can-do (ie this is essentially your 'charge' or energy to execute and grind through tough times) - I've found understanding this about yourself is essential as mis-estimating here can be brutal, hard on outside relationships, among other things
3. I'm sure there are plenty of others!